The number of investigations into cryptocurrency firms by the U.K.'s financial regulator, the Financial Conduct Authority (FCA), have seen a sharp rise in the last year.
The Financial Times said on Monday that it had obtained information indicating that the FCA is now looking into 87 firms in the space, either as part of initial scrutiny or full enforcement investigations. That number is 74 percent up from the same time in 2018, when 50 crypto firms were being investigated by the authority.
The data was reportedly provided by David Heffron, partner at law firm Pinsent Masons, who told the FT that the spike in numbers “reflects the FCA’s increasingly hands-on and no-nonsense approach" to the cryptocurrency industry.
Back in May, the FCA warned that there had been a three-fold rise in reports of online platforms fleecing investors with cryptocurrency and forex scams. The 1,800 reported scams in 2018-2019 had given rise to £27 million ($33.2 million) in lost funds, it estimated.
The authority said fraudsters tend to use social media to promote their schemes, often using fake celebrity endorsements and images of luxury items to lure naive investors.
The FCA also recently issued guidance for the crypto industry that clarified which tokens fall under its jurisdiction, and which – like bitcoin and ethereum – don't.
London image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.